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B2C (Business to customer) news
The mystery that is AmazonBooks - why are Amazon opening bookstores? Amazon wants you to believe it is all about book sales (they want to control the narrative as always) but its about other strategic objectives. Amazon is definitely using the stores as a channel to drive Prime memberships and to make customers aware of their hardware and private labels (AmazonBasics). Recode, CNBC
The consumer decision journey in the increasingly complex search retail marketplace. An argument that search is a big deal for commerce businesses. I dont disagree but marketplaces such as Amazon ensures that marketing budgets must be divided. Search Engine Land
Used cars are clearly a vertical that is getting a lot of attention from investors. This past week Auto1 Group raised and provided some insights into their size. It facilitated 330,000 vehicle transactions on its platform last year. It also says it reached revenue of €1.5 billion. Being able to close a sale in 10 days due to using their own capital will ensure that Auto1 Group will become a big player. TechCrunch
Indosat Ooredoo, Indonesia’s second largest telco by revenue, says it’s shutting down its ecommerce site Cipika. At a time when ecommerce in Indonesia is growing and investors are looking for businesses and market winners this is peculiar news. Cipika’s website now sports a thank you note to customers, saying that it will cease operations by June 1st. Tech In Asia
Alibaba and its financial services affiliate plan to lead an investment round of at least $1 billion in Ele.me, one of the largest players in a crowded Chinese food-delivery service arena. The financing from Alibaba and Ant Financial will value Ele.me at $5.5 billion to $6 billion and help it compete with a rival service backed by Tencent. Bloomberg Technology
Who owns the space between reclining airline seats? A fascinating look at space that generate conflicts between fliers. The Economist
Naspers is facing challenging times as investors and analyst cant look past their loss making ecommerce division which contains its investments in classifieds and marketplaces. An interesting read. Reuters
Earlier this year, Amazon rolled out a beta program aimed at social media influencers with high follower numbers and frequent social posts that include shoppable content. Influencers accepted into the program are given an Amazon vanity URL where they can curate their own list of recommended products sold on Amazon, and in turn earn a commission when anyone buys a product from their page. Marketing Land
“It’s going to be a siege.” That’s one expert’s view of the battle looming ahead for Singapore’s brick-and-mortar retailers as e-commerce giants prime the Lion City as a key staging ground in their fight for Asian supremacy. Social media was abuzz this week amid rising speculation that Amazon Prime Now – the US-based online retail behemoth’s two-hour delivery service – will soon be available in the city state. This Week In Asia
How a shift in product search preferences will affect Swiss economy - this is relevant to every country. We believe that the decreasing Google product searches and rising default searches on Amazon as well as Galaxus and Siroop will have a number of implications on Swiss economy, both positive and negative. Medium
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D2C (Direct To Customer) news
The partnerships between incumbent retailers, online retailers with direct to customer businesses are escalating. Its a mutually beneficial situation as the incumbent gets access to popular products and the direct to customer gets access to a large amount of shoppers that are not currently customers. This customer acquisition channel I suspect will become a path to either funding or acquisitions. Target, Nordstrom and Amazon are the most popular channels for these emerging brands. My writing
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Marketplace news
Walmart has 2 large challenges to overcome to impact Amazon's dominance: Trust and Habit. The fact is simple Amazon Prime is both a trusted platform for customers as they know they will receive their goods in the following days and its a habit. Skubana (My writing)
Amazon: “Earth’s Most Counterfeit-centric Company”? A fascinating read that raises many questions about counterfeits on Amazon.
The likelihood that Amazon will do anything about the counterfeiting issue is up for debate. Amazon’s Referral, Closing and Fulfillment fees net them a handsome sum and buoys their business. It would be hard for them to rationalize shutting down even a small part of such a valuable revenue stream. Kitlas
Stripe has unveiled a set of tools to assist multi sided marketplaces. Rather than having to each build their own in-house payments teams, Stripe Connect was launched to commoditize all the payments infrastructure needed to serve both sides of a two-sided marketplace. According to Collison, that included building a funds-routing engine, a payouts engine, onboarding management, receipts verification, as well as compliance and platform operations for U.S. and international regulatory regimes. TechCrunch
Etsy is in between Amazon's cross hairs and the move into the wedding catergory highlights Amazon's ruthlessness. As it is US only at the moment I would say that this is an experiment at the moment but Etsy has a fight on its hand. TechCrunch, Business Insider
The relationship between Walmart and JD.com is increasingly assisting both companies. Walmart launched its official online Chinese flagship store on JD.com, after the U.S. retail giant increased its stake in China's second largest e-commerce firm to 12.1% at the end of 2016. Quartz, China Money Network
Appeals court sides with Amazon in dispute over counterfeit pillowcases. The appeals court found that the district court had not erred in its decisions, and Gabby & Milo’s legal team had not proven Amazon was responsible for any issues of patent infringement, copyright infringement, or “palming off” — misrepresenting Gabby & Milo’s goods as its own. GeekWire
Flipkart, the country’s largest ecommerce company, has signed a binding term-sheet to acquire rival Snapdeal and is scheduled to undertake commercial and financial diligence in the next few days, according to people aware of the developments. The Economic Times
India's biggest ecommerce companies Flipkart and Amazon are vying for the opportunity to handle purchases for the country's largest buyer — the government.
The Government e-Marketplace (GeM) portal will manage procurement for ministries and departments for items such as laptops, air conditioners, furniture and items of daily use like stationery at both the state and central level. Services such as taxis and florists also come under the purview of GeM, which was launched in August ..
India's biggest ecommerce companies Flipkart and Amazon are vying for the opportunity to handle purchases for the country's largest buyer — the government.
The Government e-Marketplace (GeM) portal will manage procurement for ministries and departments for items such as laptops, air conditioners, furniture and items of daily use like stationery at both the state and central level.
China's biggest online retailer, JD.com, announced plans Monday to develop drone aircraft capable of carrying a ton or more for long-distance deliveries. The company said it will test the drones on a network it is developing to cover the northern Chinese province of Shaanxi. It said they will carry consumer goods to remote areas and farm produce to cities. Bloomberg
Cainiao Network, a courier aggregator backed by Alibaba Group, unveiled on Monday a smart logistics platform that uses 1 million new energy vehicles for express delivery, the latest move to ride China's logistics boom. By partnering with automakers including SAIC Motors and Dongfeng Motors, Cainiao will dedicate the cars to couriers and merchants for smart transportation, which features the use of big data, cloud computing and artificial intelligence in goods delivery. China Daily, Alizila
Nippon Express and Amazon.com are launching a logistics service that lets small and midsize businesses export products to the U.S. for as little as a third of the current cost, catering to a segment of corporate Japan that tends to be wary of overseas expansion. Nikkei Asia Review
In the first quarter of 2017, the total sales in China at Amazon’s overseas stores were 11 times as much as the same period two years ago. Chinese consumers have purchased nearly 17 million pieces of cross-border directly delivered merchandise from Amazon since the official opening of cross-border direct delivery service since October 2014 according to Amazon China. China Internet Watch
The Markets Where Marketplaces Will Never Work - a hard hitting post. However, I went on to learn a little-known truth about marketplaces. If the market isn’t structurally set up for a monopoly (or duopoly), no amount of fantastic product execution can save your business. Medium
eBay is still referenced as a digital flea market by some (images shown are a bit random). While the look and feel of its archrival Amazon is all efficiency and buttoned-down professionalism, eBay, with its sleeve-tugging sellers and fannish communities of obsessive collectors, retains a flea-market raffishness. Hyperallergic
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Fashion ecommerce news
Amazon dominates every market it touches — now it’s coming for fashion. Emotion is the essential differentiator between slinging apparel (which Amazon is pretty good at) and selling fashion (which Amazon is not yet very good at). Think of it like this: apparel is utilitarian problem solving (“I need socks”), while fashion is subjective self-expression (“I need to look good for this job interview”). The Verge
EMaar Malls have acquired 51% of Namshi from Global Fashion Group. EMaar Malls is being used to acquire businesses that will be used as a part of Noon.com. Namshi was the only profitable company in the Global Fashion Group. Namshi plus the partnership with Yoox Net-A-Porter should ensure that Noon will have all the fashion selection when Noon launches. TechCrunch, The National
Samwer brothers sell half of Zalando shares. I suspect this is to provide liquidity for Global Founders and then they will use some of the capital in new direct to customer startups. The German brothers Samwer’s investment firm, Global Founders, sold 3.78 % of its Zalando shares. The brothers’ share in the German online fashion retailers is now less than 5%. Retail Detail Europe, Reuters
Starting this month, Zalando will start piloting an on-demand returns service in Stockholm. The ‘Instant Returns’ service enables Zalando consumers to return items within a 60-minute slot, scheduling a pickup appointment of their own choice. Zalando hailed the initiative as "the next level of customer centric e-commerce innovation in Sweden." Business Insider Nordic
The Botmakers Who Rule the Obsessive World of Streetwear - a fascinating look at how bots impact limited release clothing. At 9:55, Matt and Chris are closing in on 10,000 visitors to their site. The problem is, on this Thursday their customers aren’t spending much money. Supreme releases only a handful of its seasonal collection each week, and this week’s drop isn’t a great one. Wired
Teespring Undergoes Stiff Layoffs In Corporate "Restructuring". Over the past several weeks, Teespring underwent steep layoffs, leaving a skeleton crew of twenty to thirty people at the company’s main office in San Francisco’s SoMa neighborhood. This most recent round of layoffs included both remote workers and employees now formerly present at the company’s headquarters. Crunchbase
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Mobile commerce
Online retailer Moda Operandi relaunched its mobile application, debuting a new design meant to make the online process as high-quality as the products being purchased. Launched last week, the redesign has allowed Moda Operandi to focus in on improving the experience for their customers as much as possible. This strategy is one unique to the luxury industry, where catering to a small, select group of dedicated customers is more important than trying to capture new ones. Luxury Daily, Forbes
Pepsi is putting Snapchat barcodes on millions of soda cans to market their limited edition flavor. Users can use these Snapcodes, which are 2-D barcodes that the Snapchat mobile app can read using a smartphone camera, to unlock exclusive branded geo filters, sponsored lenses with floating 3-D objects and even a mobile game within the app. Digiday
Decorative stickers are a common part of a variety of social media apps — but as of now, stickers have a new and more commerce-centered focus, thanks to Amazon. Following the latest upgrade, stickers have come to Amazon’s iOS mobile app visa its camera feed. Going forward, users are able to search for products on the Amazon site they saw in the real world by viewing them through their iPhone camera. Pymnts
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Stats and other interesting news
PayPal is not pleased with music streaming service Pandora, which last October debuted a new simplified logo with a design aesthetic similar to the digital payments company. In a lawsuit filed last week, PayPal lawyers went out of their way to paint Pandora as a struggling has-been tech company with a terrible business model and waning popularity. The Verge
A review of the AmazonFresh Pick up in Seattle - another value addition. GeekWire
Ride hailing services and ecommerce delivery vehicles are negatively impacting San Francisco traffic. This could be the case in any of the worlds larger cities. CBS Local San Francisco
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Thoughts on the news from this past week
This past week the Washington Post had a fascinating article regarding Google's attempt at providing reporting and proof to marketers that online advertising is leading to offline events (store visits and purchases). This is a hard problem to solve and from own experience it could potentially lead to retailers either doing more online advertising or less depending on their results. Online advertising for offline retailers is the most cost effective way to generate foot traffic to a store. The problem is that Google, Facebook and Snapchat have to use anonymized data to provide evidence on the ROI of the investment. Google might be the furthest in terms of getting it accurate but I am not quite buying this sudden solution.
Coupang, one of my favorite marketplaces in South Korea had a tough week. Firstly their logistics staff called Coupang Men were grossly unhappy over salary changes made without warning. If you are a large scale marketplace that is dominant you have to ensure that your margins and fixed costs are under control. Cutting salaries from people will generate negative impact that will scare away customers. It took 2 days and then the salaries were revised. To end their week they had a operational issue in which an item missed a digit on pricing that lead to record traffic and purchases. Having been on the other side of the server infrastructure Coupang will most probably have an incident team that will be looking into the situation. Mistakes happen but it can create waves of unhappy customer as who does not like a good deal?
To my US readers I hope you have a lovely Memorial Day weekend!
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